Shri Pushpendra Bhalse vs Sebi

Securities Appellate Tribunal8 February 2023Tarun Agarwala

CitationAppeal No. 171 of 2023

Ratio decidendi

The rule this decision rests on

The carrying on of investment advisory services without a certificate of registration under the SEBI (Investment Advisers) Regulations, 2013 constitutes a violation of Section 12(1) of the Securities and Exchange Board of India Act, 1992 read with Regulation 3(1) of those Regulations, where the admitted position is that no such registration was obtained. Where a contention that particular receipts in a bank account were not fees for advisory services is raised for the first time before the Tribunal and its veracity cannot be determined without factual inquiry, the appropriate course is to remit the question of the actual amount received towards advisory services to the adjudicating authority for fresh determination on the basis of evidence to be filed by the party, after affording an opportunity of hearing, while leaving the finding of violation and the directions issued undisturbed.

Written by Miss Lucy from the judgment below, not taken from a headnote.

Judgment

As delivered

BEFORE THE SECURITIES APPELLATE TRIBUNALMUMBAIDate of Decision: 08.02.2023Appeal No. 171 of 2023Shri Pushpendra BhalseProprietor of Heaven Research Security Advisory42, Vakratund Nagar,Kanadia, Indore, Madhya Pradesh- 452 016 ...AppellantVersusSecurities and Exchange Board of India,SEBI Bhavan, Plot No. C-4A, G-Block,Bandra-Kurla Complex, Bandra (East),Mumbai- 400 051 ...RespondentCS Abhishek Mishra, for the Appellant.Mr. Manish Chhangani, Advocate with Ms. Samreen Fatimaand Mr. Sumit Yadav, Advocates i/b The Law Point forRespondent-SEBI.CORAM: Justice Tarun Agarwala, Presiding OfficerMs. Meera Swarup, Technical MemberPer: Justice Tarun Agarwala, Presiding Officer (Oral)1.We have heard the learned counsel for the parties. Theappellant has challenged the order dated November 24, 2022passed by the Whole Time Member ("WTM" for convenience)2of the Securities and Exchange Board of India ("SEBI" forconvenience) holding that the appellant was carrying outinvestment advisory services without obtaining a certificate ofregistration and, therefore, violated Section 12(1) of theSecurities and Exchange Board of India Act, 1992 read withRegulation 3(1) of the SEBI (Investment Advisers) Regulations,2013. The WTM accordingly issued a slew of directionsincluding the direction to refund an amount of Rs. 19,50,832/-within three months to the investors.2. Having heard the learned counsel for the parties, we findthat admittedly the appellant was carrying out investment

advisory services without obtaining a certificate of registration

under the SEBI (Investment Advisers) Regulations, 2013. Thus,

the finding regarding violation is upheld by this Tribunal as we

do not find any error in the finding given by the WTM.

3. However, it has been urged, that various entries in the

bank account are not towards advisory fees received by the

appellant but was for other purposes for which relevant details

have been given in the memorandum of the appeal. Without

going into veracity of such contention which are raised before 3

us for the first time, we find it appropriate that these figures are

rechecked by the WTM.

4. We accordingly while affirming the violations and the

directions issued by the WTM in the impugned order, we remit

the matter to the WTM only on the question to decide as what is

the actual amount that was received by the appellant towards

advisory services. Necessary evidence may be filed by the

appellant which will be considered and appropriate orders

would be passed by the WTM within three months from today

after giving an opportunity of hearing. The appeal is partly

allowed.

5. This order will be digitally signed by the Private Secretary

on behalf of the bench and all concerned parties are directed to

act on the digitally signed copy of this order. Certified copy of

this order is also available from the Registry on payment of

usual charges.

Justice Tarun Agarwala Presiding Officer

Ms. Meera Swarup PRERNA Digitally signed Technical Member 08.02.2023 by PRERNA

PK MANISH Date: 2023.02.08 MANISH KHARE

KHARE 18:04:03 +05'30'

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